A BNP Paribas Bank sign is visible on a branch building in Nice, France, on Wednesday, September 14, 2011. (Photo: Lionel Cironneau, The Canadian Press/AP)
Canada is gaining attention from global investors who are beginning to step back from the U.S. market. According to Isabelle Mateos y Lago, the chief economist at BNP Paribas, the instability in the United States has made investors reconsider their heavy focus on the American economy. With unpredictable returns becoming more common, investors are now seeking safer, more stable options—even if those options come with slightly smaller profits.
In an interview during her visit to Toronto, Mateos y Lago explained that investors around the world had been putting a lot of their money into the U.S. economy for years. But now, they are rethinking that strategy. “Everyone’s looking at alternatives,” she said, “and every region has a chance to prove itself. Canada is one of those standout options.”
She pointed out that Canada’s recent federal election gives the country a fresh push, along with its efforts to fix internal trade barriers. These steps, she said, will help build stronger economic growth. “This is a real chance,” she noted. “I’d be surprised if Canada didn’t benefit.”
Evidence of this shift is already visible. The S&P/TSX composite, Canada’s main stock index, hit new record highs this week. This shows that investor interest is growing quickly.
Before joining BNP Paribas, Mateos y Lago worked as the chief markets strategist at BlackRock, one of the world’s largest investment firms. She believes that because the U.S. was such a top priority for so long, other markets have become undervalued—and that makes them worth a closer look.
Europe, in particular, is eyeing Canada for trade opportunities. While the distance between them poses some challenges, similarities in culture, language, and regulations make closer ties easier. “These shared traits should make trade talks smoother than with some other regions,” she said.
Both Canada and Europe are hoping to reduce their economic reliance on the U.S. This mutual interest could help trade talks move forward. Though trade deals already exist, Mateos y Lago believes there’s room for improvement. Removing more tariffs and trade restrictions would open new doors for both sides.
Canada’s growing global role is also reflected in its position as chair of the G7 this year. The upcoming G7 summit in Alberta brings together leaders from France, Germany, the U.K., Italy, Japan, and the U.S. Prime Minister Mark Carney will use this opportunity to discuss global cooperation with European allies.
According to Mateos y Lago, Canada has a critical role to play in defending the rules that have shaped global trade and cooperation. “Canada is one of the few countries that can highlight shared interests and push for unity,” she said. “The more we see global leaders agree, the more it reassures businesses and investors that the system still works.”
